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 PLUNKETT’S
FOOD INDUSTRY
TRENDS AND
STATISTICS
(Summary)

Jack W. Plunkett

Published by:
Plunkett Research, Ltd., Houston, Texas
www.plunkettresearch.com
Copyright  2003 by Plunkett Research, Ltd.

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 PLUNKETT'S
FOOD
INDUSTRY ALMANAC
CONTENTS

Chapter 1: Major Trends & Technologies Affecting the Food Industry 1

The Globalization of the Food Industry 2
Technology Enhances Productivity and Cuts Waste and Spoilage 2
Wal-Mart Becomes the Biggest Grocer in the U.S., Heating Up Competition and Driving
Retail Prices Down 3
Grocery Sales Over the Internet Finally Gain Momentum and Earn Profits 4
Big Breakthroughs/Controversy for Agricultural Biotechnology 5
The Global Rise of Obesity—Overweight Population Soars in Many Nations 7
Exacting Organic Standards Create Consumer Demand for Products 9
Health Foods Earn Healthy Profits 10
Trouble at the Golden Arches—Fast Food Companies Face Problems 10
Competition Among Bottled Waters 10
Diet Drink Sales Soar 11
Wine Makers Try Mass Marketing 11
Internet Research Tips 13

Chapter 2: Food Industry Statistics 14

U.S. Food Manufacturing: 1997-2001 15
U.S. Food Price Inflation: 1982-2002 16
Percent of Family Income Spent on Food, U.S.: 1950-2001 17
What a Consumer Food Dollar Pays for Industry-wide, U.S. 18
U.S. Store Characteristics by Format Type: 2001 19
U.S. Food and Grocery Store Format Growth Trends: 1980, 2001, 2006 20
U.S. Food Supply: Food Servings Available per Capita per Day, 1970-1997 21
World Exports in Agricultural Products, 2001 22
World Exports of Agricultural Products, By Trade Route: 2001 23
U.S. Farmers and Agriculture Profiles: 1790-2002 24
World and U.S. Supply and Use for Grains: 2000-2003 25
U.S. Meat Supply and Use: 2001-2003 26
Per Capita Consumption of Poultry and Livestock, U.S.: 1960 to Estimated 2002 27
U.S. Egg Supply and Use: 2000-2003 28
U.S. Milk Supply, Use and Prices: 2000-2003 29
U.S. Tobacco Production Overview: 1970-2003 30
U.S. Tobacco Manufacturing: 2001 31
U.S. Restaurant Industry Overview 32
U.S. Restaurant Industry Forecasts 33
U.S. Restaurant Industry: Food & Drink Sales Projections, 2002-2003 34
U.S. Restaurant Industry Operating Ratios: 2002 35

Continued on the next page

Continued from the previous page

U.S. Restaurant Industry: Average Salary and Bonus Figures 36

Beverages: Per Capita Consumption, 1970-2000 37
Top 10 Soft Drinks, U.S.: 2002 38
U.S. Alcoholic Beverages Manufacturing: 2001 39
Wine Sales in the U.S.: 1991-2002 40
Plunkett Research, Ltd.
Chapter 1
MAJOR TRENDS AND TECHNOLOGIES
AFFECTING THE
FOOD INDUSTRY
Major Trends Affecting the Food Industry:
1. The Globalization of the Food Industry
2. Technology Enhances Productivity and Cuts
Waste and Spoilage
3. Wal-Mart Becomes the Biggest Grocer in the
U.S., Heating Up Competition and Driving
Retail Prices Down
4. Grocery Sales Over the Internet Finally Gain
Momentum and Earn Profits
5. Big Breakthroughs/Controversy for
Agricultural Biotechnology
6. The Global Rise of Obesity—Overweight
Population Soars in Many Nations
7. Exacting Organic Standards Create
Consumer Demand for Products
8. Health Foods Earn Healthy Profits
9. Trouble at the Golden Arches—Fast Food
Companies Face Problems
10. Competition Among Bottled Waters
11. Diet Drink Sales Soar
12. Wine Makers Try Mass Marketing
At the end of the Civil war in 1865, farmers
made up about 55% of the workforce in the United
States. By 1900, 38% of working Americans still
toiled on 5.7 million farms—growing enough food to
feed the nation’s population of 76 million. Today,
CopyRight©2003 Plunkett Research, Ltd., All Rights Reserved
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only about 2.5% of the U.S. workforce is employed
on farms. The total number of American farms is
down to a little over 2 million, but that dwindling
count of farms and farmers takes care of the domestic
needs of a national population approaching 300
million—nearly four times the population of 1900.
Since the early 1900s, the amount of manpower
required to grow food has plummeted. The relative
cost of an American family’s food has likewise
dropped impressively. According to the Federal
Reserve Bank of Dallas, in 1901 46.4% of a typical
American household’s income went to food. By
1995 that ratio had dropped to 14.0%. Here’s another
way to look at it: In 1919, at the end of World War I,
a basket of staple food items (one pound each of
coffee, bacon, bread, beans, onions, lettuce and
ground beef, plus generous amounts of sugar,
tomatoes and other items) cost what an average
American would earn in 10 hours of work. By 1995,
that cost had dropped to less than two hours. Of
course, the drop has been caused by increases in total
personal income, as well as improvements in food
technologies. Outside the U.S., other industrialized
nations have made outstanding strides in food cost,
availability and quality. Many developing nations
have seen vast improvements as well. (Ironically,
while we all need food to live, and we tend to derive
tremendous enjoyment from good food, we
Plunkett Research, Ltd.
nonetheless do a poor job of compensating most
people who work in the food industry. From fry
cooks to chicken pluckers to vegetable cookers, many
people who work in the food sector receive very low
wages.)
Meanwhile, throughout much of the world,
technology and globalization have revolutionized the
way that we grow food, as well as the way that we
transport, process, package, purchase and cook it.
Waste and spoilage are down to nominal levels
thanks to innovations like interstate highways and
refrigerated trucks. Meanwhile, it’s an everyday
occurrence for consumers in the U.S. to pick up
strawberries from New Zealand or mangos from
Mexico in the fresh produce section of the local
supermarket. Globalization has led to the rise of
massive multinational food processing companies
like Nestle and Kraft, which often sell their foods
under local names in local languages, after producing
them in regional factories worldwide.
The types of technologies affecting the food
industry have evolved over time. From mechanized
tractors and implements to diesel trucks to flash
freezing, food technology has moved on to become
high-tech. Today, computerization has made marked
changes in the food industry: electronic data
interchange ensures that inventories and shipments
are well-managed so your local grocer doesn’t run
out of the products that are selling quickly. Point-of-
sale systems at the cash register capture minute-by-
minute sales data. Next, biotechnology is making
sweeping changes at the ground level—in seed stocks
and agricultural animal health. In fact, gradual
genetic improvement of grain seeds like rice and
wheat, combined with better fertilizers and other
technologies, has created a “green revolution,”
enabling nations like China and India to turn from
agonizingly underfed populations to a large degree of
food self-sufficiency and, in some cases, net exports
of bounteous crops. Now, genetically modified seeds
are gaining ground with the promise of crops that not
only resist insects and have extremely high yields per
acre, but also produce high levels of desirable
nutrients and vitamins.
The following is an analysis of major trends
shaping the food industry today:
1) The Globalization of the Food Industry
The food industry is arguably the best example of
the sweeping trend of globalization that is affecting a
broad spectrum of businesses and industry sectors.
When traveling the world, you are likely to see
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McDonald's, Burger King and Kentucky Fried
Chicken franchises cheek and jowl with the Eiffel
Tower, the Great Wall of China or the Sydney Opera
House.
Of the 650 million bottles of Heinz ketchup
produced each year, more are sold overseas than in
the U.S. Conversely, almost any household in the
U.S. contains products such as Perrier, Nestea,
Stouffer's frozen foods and Coffee-Mate, which are
manufactured and sold by Swiss giant Nestle SA.
Globalization is, in the simplest terms, a constant
flow of capital, goods and services from one country
to the next. As manufacturers identify new foreign
markets, direct investment occurs within those
markets to fund production, distribution, marketing
and sales. Major food companies have become truly
global in nature with offices, production plants and
stores around the world and sales that impact GDP in
almost every country on the planet.
According to Dr. Mike Boehlje of Purdue
University, the factors driving this trend in the food
industry are the move to market-based economies,
the establishment of the World Bank, IMF (the
International Monetary Fund) and WTO (the World
Trade Organization), advances in technology that
expand geographic reach, improved transportation
and logistics and dietary transitions occurring around
the world, particularly in Asia. The strongest
globalization trends are found in North America,
Japan, Europe and East Asia, while the weakest are in
Sub-Saharan Africa and the former Soviet Union.
2) Technology Enhances Productivity and Cuts
Waste and Spoilage
Comprehensive changes are affecting every sector of
the food industry, from production to distribution to
sales and inventory management. Farms today are
highly mechanized, and processes such as in-vitro
fertilization, computer-controlled sprayers and
planters and the use of global positioning systems
(GPS) for precision farming are the norm.
In terms of packaging, tremendous advances have
been made in cans, bottles, bags and boxes, resulting
in greater quality, freshness and convenience. Nestle,
for example, tested a canned instant coffee product in
the U.K. called Nescafe Hot When You Want. The
can contains separate compartments that hold water
and a quicklime chemical and is armed with an
activation button. Push the button, and the water and
chemical combine to heat the can. In three minutes,
the coffee’s temperature reaches 140° F, which is not
quite hot but certainly warmer than room
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temperature. The can is insulated to prevent burnt
fingers or lips.
Self-cooling containers are also on the horizon. They
work using one of two technologies: thermal
insulation combined with vacuum packing to draw
heat from the contents and store the resulting vapor in
the bottom of the can; and refrigerant capsules that,
when punctured, release CO2 which rapidly cools the
food or beverage.
Other packaging advances include films and coatings
such as anti-microbial plastics that hinder the growth
of harmful bacteria and mold. Watch for new
wrappings for meat, dairy products and seafood that
react to temperature changes. If a product exceeds a
safe temperature at any point from the packing plant
to the display case in a grocery store, the packaging
will change color.
Among the biggest changes in food industry
technology are advancements in inventory control.
Today, you’ll find at least a basic computer system in
nearly all U.S. stores. Virtually all chain retailers are
utilizing “point-of-sale” computer systems, in which
bar code scanners immediately capture sales
information at the cash register, adjust the inventory
in the store's computer and reorder merchandise
automatically. This technology, called EDI or
electronic data interchange, has been around for a
long time and helped companies like Wal-Mart and
Kroger to become giants in their segments.
Nonetheless, many chains were slow to adopt it. The
more advanced point-of-sale systems prompt cashiers
with suggestions of additional merchandise to offer
that complement the items being purchased, or
generate personalized coupons.
The biggest breakthrough in inventory management
is the placement of microchips in product packaging,
combined with the use of special sensors on shelves
that alert a central inventory management system as
to product purchases and the need to restock
inventory. From loading docks to store shelves to
cash registers to parking lots, radio frequency readers
will track the movement of each and every item. Bar
codes will be replaced by radio frequency
identification (RFID), electronic product information
stored on the microchips. The chips even eliminate
the need to scan each item at checkout. Checkout
stations will be equipped with receivers that
automatically calculate purchases. These systems
can lead to great reductions in shoplifting and the
elimination of costly manual inventory counts.
Another benefit to RFID is that manufacturers will be
able to reduce overall inventory thanks to greater
efficiency. Proctor & Gamble, for example, hopes to
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cut its inventory by as much as 40%. Marks &
Spencer, a major retailer in the U.K., is replacing bar
codes with an RFID system, including tags for the
millions of containers that hold food being shipped
from suppliers to its stores. It takes a mere five
seconds to scan 50 containers, an 85% improvement
in the time it takes to scan using bar codes. The
savings in time as well as the cost of spoiled food are
expected to make the system's $3-million price tag
feasible. Wal-Mart is heavily invested in this new
technology and is currently testing RFID tags in
some of its merchandise.
Checkout procedures are changing as well. Self-
checkout stations are proliferating at a great rate.
Nearly 30% of major supermarket chains have
installed self-checkout systems in at least a few stores
at which shoppers may scan their own items, bag
them and pay using ATM-like kiosks, which accept
debit and credit cards as well as cash. Another
alternative are handheld scanners that shoppers carry
with them, scanning each item as they remove it from
the shelf, refrigerated case or produce bin. This
practice is far more prevalent in Europe than in the
U.S.
For more on the impact of technology in the food
industry, see "Big Breakthroughs/Controversy for
Agricultural Biotechnology" later in this chapter.
3) Wal-Mart Becomes the Biggest Grocer in the
U.S., Heating Up Competition and Driving
Retail Prices Down
The grocery business is being deeply affected by
the boom in discount shopping. The biggest player
here is discount giant Wal-Mart. It is rapidly adding
new Wal-Mart Supercenters to its chain, with
immense, well-stocked, supermarket-like grocery
departments that work on profit margins about 60%
lower than the margins employed by traditional
supermarkets. Shoppers who bypass the
neighborhood supermarket to go to a Wal-Mart
Supercenter know that they will save substantial
amounts of money. At the same time, Wal-Mart’s
non-grocery departments benefit when these grocery
shoppers pick up items elsewhere in the store. Wal-
Mart management knows that the average shopper
makes several grocery shopping trips weekly. These
supercenters have been designed to sell top-quality
groceries at bargain prices in order to bring those
frequent shoppers into the total Wal-Mart shopping
environment—thus driving up average sales.
In the process, Wal-Marts are stealing large
amounts of market share from traditional grocers, and
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the entire supermarket industry is likely to go through
the same sorts of overwhelming changes that
discounters forced on many other types of stores.
Discount leaders Costco and Target likewise sell
huge quantities of groceries at everyday low prices
based on thin profit margins. Wal-Mart rang up an
estimated $60 billion in annual grocery department
sales during 2002, which makes it the nation's largest
grocer based on revenues, followed by Kroger at
about $50 billion.
The success of the grocery venture is fueling
significant expansion for Wal-Mart. The number of
supercenters reached 1,060 in 2002, with at least 70
more scheduled to open in 2003. The competition is
fierce indeed for competitors such as Kroger and
Safeway. Typically, traditional supermarkets have a
gross profit margin of approximately 24%, from
which they must meet payroll, advertising costs and
maintenance. Wal-Mart can remain successful with a
grocery area margin as low as 16%, which is sending
traditional supermarkets into a frenzy of effort to cut
costs and streamline their operations.
One of the ways in which traditional
supermarkets are fighting back is to cater to the
upscale market. H.E. Butt Grocery Co., for example,
is enjoying remarkable success with its Central
Market concept, featuring high-end items such as
caviars and pates, extensive wine departments, exotic
produce and more, housed in an exciting
marketplace-like setting.
Likewise Kroger is building Signature stores that
stock items based on surveys mailed to consumers in
surrounding neighborhoods prior to a store’s grand
opening. For example, local customers might
respond with requests for specific brands, or for an
especially broad selection of fresh seafood. As a
result of this focus, stores built in neighborhoods with
heavy Asian populations stock items such as Chinese
long beans, sweet cooking wine, jasmine rice and
miso. Hispanic neighborhood stores stock tortillas
made fresh on-site, a broad selection of peppers,
fresh salsas and favored brands such as Goya. Prices
are not as low as those found at Wal-Mart, but the
selection is significantly higher and tailored to each
market.
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Spotlight: Wal-Mart Neighborhood Markets
In a move diametrically opposed to the concept
of a supercenter, Wal-Mart has opened a total of 49
"Small-Marts" in Arkansas, Texas, Oklahoma,
Florida, Tennessee, Mississippi, Alabama and Utah.
Opened with little fanfare and a decided lack of
national marketing, the new stores average between
39,000 and 55,000 square feet (as opposed to 100,000
square feet for standard Wal-Marts and 180,000
square feet for supercenters).
Neighborhood Markets offer groceries, a
pharmacy, a deli, photo processing, gasoline pumps
and a convenience store-like "Grab It and Go!" area
stocked with coffee, tea, soft drinks and snacks.
The concept has been around since 1998, and
plans for new stores have been announced in Florida,
Tennessee and Missouri, among others. Expansion is
planned at a rate of 25 openings each year, a figure
which seems small when compared with the
supercenter growth of 70 new stores per year.
Thinking small may prove to be another area in
which Wal-Mart succeeds in a big way.
4) Grocery Sales Over the Internet Finally Gain
Momentum and Earn Profits
The Holy Grail of e-commerce is to convince
grocery shoppers to order over the Internet. Online
grocery selling is such an appealing target because of
the sheer size of the retail grocery market ($517
billion for 2002 in the U.S.). However, creating a
viable online grocery business is a daunting
challenge. Food retailing, with its highly perishable
inventory, is a low-profit-margin enterprise—one in
which consumers tend to make multiple trips to the
market each week to select and purchase first-hand.
Peapod, an aggressive home grocery delivery
service that has been in business since 1989, is
building a base of online shoppers slowly but surely.
It operates in conjunction with major retail grocery
chains such as Giant and Stop & Shop in Boston,
Massachusetts; Chicago, Illinois; northwest
Washington, D.C.; Long Island, New York; and other
areas. Customers order online via Peapod.com and,
for a fee, receive home delivery of their groceries,
which are packed at warehouses near participating
supermarkets. Despite its lengthy history and wealth
of experience, Peapod has struggled financially. It
was acquired in 2001 by one of the world’s largest
supermarket chains, European-based Royal Ahold.
The most ambitious effort to date was launched by
Webvan Group, Inc., which resulted in one of the
largest new business failures in U.S. history. The
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idea was conceived by Louis Borders, well-known as
the founder of the Borders book superstores.
Webvan began selling groceries to Internet customers
in the San Francisco Bay area in mid-1999.
Together, Webvan and the HomeGrocer firm it
acquired went through $1.2 billion dollars in venture
fund capital, debt and the proceeds of public
offerings.
Webvan’s initial plan was to rapidly gain market
share by building highly automated warehouses in 26
major markets across the U.S. It began by
constructing a state-of-the-art warehouse in Oakland,
California, totaling 330,000 square feet, to serve the
greater San Francisco area. Additional warehouses
were built in other major markets as services were
loudly launched. Despite its leading-edge technology
and deep pockets, Webvan was unable to satisfy the
needs of consumers in most markets. Myriad
problems existed. For example, many consumers
were not able to get home delivery during prime
after-work hours unless they scheduled purchases and
deliveries several days in advance. Webvan found
that changing consumers’ habits to lure them into
shopping online is extremely difficult to
accomplish—most people want to shop at a physical
store, and they make the decision to grocery shop on
the spur–of–the moment. Despite the vast amounts
of money invested in starting this business, Webvan
ceased operations after filing for bankruptcy in July
2001.
Nonetheless, some positive news is beginning to
emerge from the online grocery segment. Peapod
announced in Spring 2001 that it was finally earning
an operating profit in one of its markets, Chicago.
By early 2003, Peapod stated it was generating
positive cash flow in four out of its five markets. In
addition, supermarket giant Safeway purchased a
controlling interest in a Texas-based firm called
GroceryWorks.com and used this platform to create
online grocery sales with home delivery in selected
markets. In mid-2002, the firm introduced home
delivery in 65 zip codes in the San Diego area for
customers of the Safeway-owned Vons supermarket
chain. Albertson’s has slowly been rolling out
similar services in selected markets since 1999.
Publix Supermarkets also has an online unit,
PublixDirect. FreshDirect.com is a relatively new
firm funded with $100 million in venture capital. It
focuses on serving upscale customers within
Manhattan.
Online grocery shoppers tend to be busy
professionals, time-challenged mothers of small
children or people who largely stay at home because
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of a lack of mobility. They tend to be better educated
and make larger average purchases than walk-in store
customers. They also tend to be very loyal, because
they are seeking a timesaving convenience. Watch
for steady growth in online grocery sales, driven
largely by marketing initiatives at existing
supermarket firms rather than startups. Analysts at
Forrester Research project that online grocery sales
will grow 46% in 2003 to $3.5 billion.
5) Big Breakthroughs/Controversy for
Agricultural Biotechnology
The biotech-era technology of “molecular
farming” will soon lead to broad commercialization
of human drug therapies that are grown via
agricultural methods. For example, by inserting
human genes into plants, scientists can manipulate
them so they grow certain human proteins instead of
natural plant proteins. The growth in plants of
transgenic protein therapies for humans may become
widespread. Such drug development methods may
prove to be extremely cost-effective. At the same
time, hundreds of antibodies produced in farm
animals, using biotech means, for use in human drug
therapies are currently under development or in
clinical trials.
Meanwhile, genetically modified foods
(frequently referred to as “GM” for genetically
modified, or “GMO” for genetically modified
organisms) offer tremendous promise in
agriculture—particularly in low-income/high-
population-growth nations like China and India.
Although scientists have been able to engineer highly
desirable traits in GM seeds for crops (such as
disease-resistance and insect-resistance), and the
scientific community has given GM foods a clean bill
of health for years, such modified foods face stiff
resistance among many consumers, particularly in
Europe.
Agricultural biotechnology became a significant
commercial industry during the 1980s. It was
fostered both by startups and by large chemical or
seed companies. All of these players were focused
on developing genetically modified seeds and plants
that had higher yields, better nutritional qualities
and/or resistance to diseases or insects. Additional
traits of GM plants include resistance to temperature
and moisture extremes. By 2001, over 50 million
hectares of GM crops were planted worldwide—
mostly in the U.S., but large amounts were also
planted in Argentina, Canada, Mexico, Romania,
Uruguay and South Africa. Meanwhile, GM seeds
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have the potential to create vast benefits in low-
income nations where reliance on small farms or
gardens is high and food is scarce. China has made
massive investments in agricultural biotechnology
research and may raise such spending several fold
between 2001 and 2005.
At the same time, researchers are modifying the
structural makeup of some plants in order to alter
leaves, stems, branches, roots or seed structures. The
ability to modify the nutritional makeup of plants can
have highly desirable effects. For example,
Mycogen, an affiliate of Dow AgroSciences, has
developed sunflower seeds with higher levels of
desirable oleic and linoleic acids—acids with
exceptional nutritional value.
There are currently dozens of agribio food
products on the market. These range from fruits to
vegetables to nuts. There is significant potential for
rapid development of new products, thanks to the
same technologies that are pushing development of
human gene therapies in the pharmaceutical industry.
Naturally, large numbers of seed and plant
biotechnology patents have been filed. Meanwhile,
over 100 patents relating to genetically modified
animals have been filed—genetic engineering has the
potential to create significant changes in the health
and growth of agricultural animals as well as plants.
In the same way that the development of genomics
technology has opened up a wide and exciting vision
of treatments for human disease, the study of
agricultural animal genomics will enable the industry
to maintain animals that are disease-resistant and that
have desirable physical traits.
U.S. farmers have enjoyed greatly increased crop
yields and crop quality thanks to GM seeds, and by
some estimates as much as 70% of U.S. food may
contain ingredients that have been grown with GM
methods. In particular, U.S. farmers are reaping
tremendous crops of GM soybeans, cotton and corn.
These crops may eventually become ingredients in
everything from soft drinks to baked goods.
While many areas of biotechnology are
controversial, agricultural biotech is presently the
largest target for consumer backlash and government
intervention into the marketplace. The market for
genetically engineered seeds has already reached the
$50-billion-plus stage, but consumer resistance to
food products containing material grown in this
manner is sometimes fierce, and the near-term
outlook for the market is cloudy at best.
In the fall of 2000, a relatively small quantity of
taco shells were found to have been manufactured
with cornmeal made from GM corn known as
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StarLink. Unfortunately, StarLink was intended for
hog feed rather than human foods. Interestingly, the
StarLink affair seems to have had little long-term
effect on consumer preferences in the U.S., although
there were loud cries for more government regulation
at the time.
Consumers in Europe have a strong fear of GM
foods. It may stem in part from a cultural preference
for locally grown and processed, natural foods. Basic
European grocery shopping habits and food
preparation habits vary from those of U.S.
consumers. For example, Europeans tend to shop
today for tonight’s meal, rather than stocking up on
several days’ worth of food. Europeans also suffered
mightily from the outbreak of mad cow disease in
1996, which contributed to their concerns about food
sources.
A particular concern among farmers in many parts
of the world is that GM crops may infest neighboring
plants when they pollinate, thus triggering unintended
modification of plant DNA. In any event, there is a
vast distrust of GM foods in certain areas. U.S. food
growers and processors face increasing difficulty
exporting to the European Union (EU) because of the
reliance that American farmers place on GM seeds.
Since 1998, the EU has placed a moratorium on
approving the import of new GM foods. The EU also
plans to require content disclosure on the label of any
food product containing more than 0.9% GM
ingredients. Other nations, while continuing to
accept GM food imports from the U.S., are
considering similar labeling requirements.
In October 2002, the United States tried to donate
nearly 26,000 tons of food to the hungry people of
Zambia. Most of the food offered was corn grown
using standard GM seeds in the U.S. Zambia’s
president turned it down, despite widespread
malnutrition in parts of his nation. His reasoning was
that anti-GM nations in Europe would thereafter
refuse to purchase Zambian-grown food exports for
fear that they might be tainted by contact with the
GM corn. (The issue of GM corn is particularly
complex. Unlike wheat and rice crops, where the
grain’s flower pollinates itself, corn pollinates by
dispersing vast quantities of tiny pollen grains into
the wind, randomly fertilizing nearby corn ears.)
Some groups that claim to be concerned about the
environment are also anti-GM. Some anti-GM
activists have arguments with big business—
particularly with the giant corporations like
Monsanto that make GM seeds. In 2000 alone, there
were over 30 acts of anti-biotech terrorism around the
world, including the firebombing of a biotech lab at
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the University of Michigan. Also in 2000, a U.S.
trade representative, Charlene Barshefsky, quietly
signed a new section of the Convention on Biological
Diversity that may allow member countries of the
World Trade Organization to stop the importation of
any biological product at any time.
Spotlight: Monsanto
Agribio giant Monsanto, a global company with
large market share in the seed and agricultural
chemicals business, is working on several exciting
modified plants with tremendous potential benefit,
including:
• High stearate soybeans that may help people
maintain healthier cholesterol levels.
• Potatoes developed with higher solids content.
Such potatoes can have decreased processing
costs because less energy is needed to extract
water when producing potato products. The
higher solids content of potatoes holds the
potential to bring consumers lower-fat chips.
Since oil replaces water during frying, potatoes
with higher solids content (and thus less water)
absorb less oil.
• Corn and soybeans with increased essential
amino acids, the building blocks of protein. This
may improve the quality of protein in food
products and animal feed made from these crops.
• Mustard plants enhanced with genes for vitamin
A expression.
By introducing a small part of the DNA from a
virus into the genetic makeup of a plant, Monsanto
has developed crops that have an in-built immunity to
targeted diseases.
6) The Global Rise of Obesity—Overweight
Population Soars in Many Nations
Obesity is increasing in nearly every country in
the world. The problem is at its worst in the U.S.,
where obesity has doubled in the past 20 years to
about 30%. A study of a sample of 4,115 adult
Americans published in the October 9, 2002 issue of
the Journal of the American Medical Association
found that the age-adjusted prevalence of obesity was
30.5% (the study was actually conducted in 1999-
2000). This was a significant increase from 22.9% in
the previous study (made during the 1988-1994
period). The number of people either overweight or
obese was estimated at 64.5%, up from 55.9%.
These are official studies under a program referred to
as NHANES—the National Health and Nutrition
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Examination Survey. A report issued by the U.S.
Surgeon General in 2001 found similar, although
slightly lower, levels of overweight and obesity.
It is interesting to compare American obesity
levels to those of other nations. For example, the
Organization for Economic Cooperation and
Development reports that Britain and Australia are
not far behind the U.S., with obesity rates of 21% and
20% respectively, while the obesity rate in France is
only 9.6% and in Japan it is only 2.9%. However,
while the French and Japanese rates are relatively
low, they have nonetheless seen significant increases
over the previous 10 years.
Body Mass Index (BMI) as an indicator of health
status based on weight:
Underweight = less than 18.5 BMI
Normal weight = 18.5 to 24.9
Overweight = 25 to 24.9
Obese = 30 or more
To calculate Body Mass Index:
First: divide weight (pounds) by height (inches)
Second: divide the result by height again
Third: multiply the result by 703
Internet Research Tip:
For an easy-to-use, online calculator and a full
discussion of BMI, see http://nhlbisupport.com/bmi/
Source: National Institutes of Health, National
Heart, Lung and Blood Institute
The U.S. Surgeon General estimates that obesity
resulted in 300,000 American deaths in 2000, and
$117 billion in health care costs. One of the most
critical problems of obesity is the onset of diabetes.
If obesity rates continue to skyrocket, the number of
diabetics worldwide is expected by some experts to
triple in the years from 2000 to 2015 to 320 million.
The impact of these numbers combined with an
accompanying rise in heart disease, cancer, high
blood pressure and cholesterol levels may wreak
havoc in the heath care system.
Children and adolescents are also facing obesity
in record numbers. The number of overweight 6- to
11-year-olds in the U.S. has doubled since the early
80s. Consequently, pediatricians are seeing
conditions and illnesses (such as Type II diabetes)
rarely found in children before.
The culprit is high-calorie diets combined with
sedentary lifestyles. Countless studies have shown
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that people are watching more television or spending
more time at the computer while their eating habits
have gravitated away from the family dinner table to
the sofa, desk and, more and more often, the family
car. People around the world are bombarded with
tantalizing ads for fat-filled fast foods. Food
companies are the second largest advertisers in the
U.S. behind automobile makers, spending $33 billion
on ads and promotions in 2002. In addition, the
number of places in which to buy food is
proliferating at a dizzying rate. Drug stores and gas
stations are now stocked with foods, largely snacks
that are high in fat and calories. Food courts can be
found in any shopping mall. Vending machines are
popping up in offices, schools and public gathering
places of all kinds.
A dining habit that may be adding to weight gain
is gorging on fast food while riding in the car. Fast
food drive-throughs are everywhere, and by one
estimate, as much as 6% of all breakfasts in the U.S.
were eaten in automobiles in 2002—double the
amount of 1997.
Portion sizes, in the U.S. especially, have reached
epic proportions. For example, McDonald's original
hamburger, french fries and Coke meal added up to
590 calories in 1957. Today, a Quarter Pounder with
cheese, supersized fries and supersized drink totals a
whopping 1,550 calories. Movie popcorn was sold in
three-cup serving sizes in the 50s. Now, a medium
popcorn order at most movie theaters contains 16
cups.
Clerks in fast food restaurants and concession
stands are trained to point out the value of supersized
orders. At Wendy's, a Classic Single Old-Fashioned
Combo of a hamburger, medium french fries and
drink costs $3.89. For an additional $0.39, a Biggie
Size fries and drink can be substituted, adding 180
calories to a meal that started at 1,360 calories.
Thirsty? Try a 64-ounce Big Gulp from 7-Eleven.
Choosing that size of any beverage that contains
sugar takes the count up to 800 calories, while the
cost per ounce to the consumer is far less than the
smaller sizes.
Physiologists point out that the tendency to prefer
foods that are higher in fat is natural. Throughout
man's history, in fact, until very recently in many
parts of the world, the scarcity of food brought about
malnutrition, disease and death. Those who could
find more to eat did so to prepare for the next famine.
Individuals with higher body weights were more
likely to reproduce successfully. Occasional
excessive eating was necessary for survival.
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Today, the world is highly mechanized. Jobs that
used to require heavy physical labor such as
lumberjacking, ditch digging and farming are largely
done by machine. Daily caloric needs have dropped
and the availability of foods, especially inexpensive,
high-fat, high-calorie foods, has soared to levels
never before seen. According to USDA food-supply
data, an increase of 500 calories per American per
day in typical calories ingested occurred between
1984 and 2000.
Attempts to stem the tide of rising obesity have
so far met with little success. Administrators at
schools in 10 states are discussing ways to limit or
ban the sale of soft drinks and snack foods on
campus. This may prove extremely difficult, since
approximately 50% of U.S. schools have pouring
rights contracts with particular soft drink companies
to supply beverages to entire districts. The contracts
pay lucrative fees to school districts, and pressure is
placed on school administrators to keep signing such
deals in order to receive funds for sports teams, study
materials and other equipment. The same is true for
deals made between school districts and fast food
companies which are brought into cafeterias and
snack bars.
In 2002, a bill was proposed in the U.S. Senate
called the Improved Nutrition and Physical Activity
Act (IMPACT). IMPACT, if passed, would provide
roughly $258 million in grants for obesity treatment,
nutrition education, construction of exercise paths in
city parks and tax incentives for companies and other
agencies that promote healthy food. The bill is
currently under consideration in the House of
Representatives.
The legal community is also jumping into the
fray with several recent lawsuits reminiscent of those
against tobacco companies. These cases charge fast
food companies with negligence and intentional
marketing of foods with links to obesity, diabetes,
heart disease, high blood pressure, stroke and cancer.
Plaintiffs include classes of overweight children and
adults who face defendants such as McDonald's,
Wendy's, Kentucky Fried Chicken and Burger King.
As with tobacco suits, the question is one of
responsibility. Are obese adults responsible for the
foods they eat and the results of those choices? What
may prove to be a question that food companies
cannot answer successfully in court is, "Are children
responsible?" Food companies around the world are
scrambling to assess their marketing practices.
Saturday morning television ads, lovable characters
such as Ronald McDonald (the second most
recognized character among children after Santa
Plunkett Research, Ltd.
Claus) and toys packed in children's meals may prove
to be unacceptable inducements to dine on high-fat
fast foods. It is far too soon to gage, however, since
pending suits are expected to be mired in legal
wrangling for years to come.
Only one country has achieved any sort of
success rate when combating the obesity epidemic.
Singapore, which requires military service of all
adults, has instigated an extended six-week training
camp for recruits who are obese in addition to its 10-
week basic boot camp. After discharge from the
service, most Singaporean men and women remain
on reserve status, which requires an annual physical
and basic fitness test.
Cashing in on Fat: The Weight Loss Industry
Sales of weight loss programs and products such
as Weight Watchers, Jenny Craig and Slim-Fast
reached $24 billion in 2002, a rise of 7% over the
previous year. Additional revenues generated by
gyms, health clubs and weight loss prescriptions raise
the total to $40 billion.
Weight Watchers is the top weight-loss company
with $810 million in 2002 revenue, with Slim-Fast, a
subsidiary of Unilever, close behind at $800 million.
Two popular diet programs that restrict
carbohydrates, the Atkins diet and The Zone, are also
producing food products such as nutrition bars,
baking mixes and meal replacement drinks.
Even companies known for high-fat and high-
calorie foods such as chips and beer are trying to
develop products for the diet market. Anheuser-
Busch recently debuted Michelob Ultra, a light beer
with only 2.6 grams of carbohydrates and 95 calories
per serving. At the Frito-Lay snacks unit of PepsiCo,
tests are underway for a snack chip that contains
broccoli, and low-fat baked potato chips and pretzels
comprise a significant portion of this subsidiary’s $14
billion in yearly sales.
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7) Exacting Organic Standards Create
Consumer Demand for Products
Although organic farms provide less than 2% of
the food supply in the U.S. and occupy less than 1%
of the farmland, the market for organic foods has
grown in the past 10 years by 15% to 20% each year.
Sales of organic foods exceeded $11 billion in 2002.
The term organic typically refers to crops grown
without pesticides, herbicides or fungicides. As of
October 2002, food that bears an organic label must
meet criteria set by the U.S. Department of
Agriculture (USDA). Specifically, these products
may not contain artificial flavors, colors,
preservatives or fertilizers, synthetic pesticides,
irradiation (germ-killing radiation) or genetically
engineered ingredients. Foods certified as natural, as
opposed to organic, may have been exposed to
artificial fertilizers, synthetic pesticides, irradiation
and genetically engineered ingredients. With regard
to meat and dairy products, the organic label requires
that livestock be fed only organic grains or grasses,
and that they be free from growth hormones and
antibiotics. Livestock also must have access to the
outdoors.
The impact of federal regulation has, in some
cases, brought about higher sales for organic
products. Consumers are more willing to pay the
higher prices for organic products that meet USDA
standards. The market for organic pork, for example,
has seen growth in supermarkets because of the new
certification.
Organic foods tend to sell for an average of 15%
more than traditionally grown foods. A growing
number of consumers, individuals and restaurant
buyers alike tout organic foods as having superior
flavor and texture. Other proponents cite the health
benefits of avoiding chemicals and potentially
poisonous treatments used as pesticides. There is
currently no research data to support these claims.
Organic products have limited shelf life since
they contain no preservatives. Consequently, they
must be picked and/or packed when they reach
optimum freshness and quickly shipped to nearby
markets to avoid spoilage. Major grocery store
chains such as Kroger, Wal-Mart, Whole Foods and
Costco are large enough to contract with multiple
organic farmers since there are store locations
throughout the U.S. and beyond, and are therefore
close enough to suppliers to take advantage of the
small window of opportunity before organic products
spoil.
Plunkett Research, Ltd.
8) Health Foods Earn Healthy Profits
Worldwide sales of foods that claim to foster
nutrition, health, weight loss or other advantages are
enjoying immense sales. The U.S. accounts for about
one-third of the market for such foods, followed by
Europe, Japan and the balance of Asia. Many types
of food and nutrition products are considered to fall
into this broad sector, ranging from vitamins to
dietary supplements, organic foods and “functional”
foods (foods that are enhanced in some way, such as
products heavily fortified with vitamins or minerals).
Total nutrition industry sales are more than $50
billion yearly in the U.S. (including certain types of
personal care items). Annual dietary supplement
sales alone are more than $17 billion in America.
A handful of U.S.-based chain store firms have
built very impressive businesses by focusing on
health foods and supplements. Among them are
supermarket firms Whole Foods (with over $2.6
billion in annual sales) and Wild Oats (over $900
million). Another impressive chain is General
Nutrition Companies, creator of the GNC stores.
Meanwhile, there are several very successful
companies that either manufacture or distribute
processed foods that cater to the health foods sector.
Impressive success will continue to be found in this
growing sector, which is now a significant part of the
food industry overall.
9) Trouble at the Golden Arches—Fast Food
Companies Face Problems
For the first time in its history, McDonald's
Corporation is posting losses. For 13 consecutive
months in 2002-2003, the fast food giant reported
declines in “same-store” (stores that have been open
at least one year) sales, citing a slowing U.S.
economy, changes in consumer tastes, the Iraqi
conflict and a possible over-penetration in Europe as
the cause.
CEO Jim Cantalupo, who came out of retirement
to step into the top office in early 2003, plans to
reorganize the company with an emphasis on
operations and menu improvements as opposed to
global expansion. McDonald's will open 360 new
restaurants around the world in 2003 (having opened
1,000 the previous year) and will close 700 locations
that are under-performing. Plans to refurbish existing
restaurants have been put on hold, and cuts
amounting to $700 million have been made from the
company's 2003 budget.
Food enhancements include a change in
seasoning in its hamburgers and improvement in the
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quality of sandwich buns. Its Chicken McNuggets
will now be made with white-meat chicken only, and
several healthy choices will be added to the menu,
including a Grilled Chicken Flatbread sandwich and
entrée salads with Newman's Own dressings to be
offered in the U.S.
McDonald's was formerly able to outstrip the
competition due to its impressive real estate holdings.
While 85% of its restaurants are franchised, the
company owns much of the land and the buildings in
which the franchises are run. In addition to a 4%
franchise fee from sales, the company also receives
rent for the buildings and land. Its rapid expansion
policy worked as long as building and realty costs
were kept low enough. Now, McDonald's is facing a
saturation problem in addition to changing consumer
tastes and difficulties in maintaining acceptable
levels of customer satisfaction. Traditionally, the
company has not been successful at building sales in
existing stores. The current situation requires it to
become adept in the very area in which it has been
historically lacking.
The slump in fast food is sweeping, with number-
two Burger King facing similar drops in revenue.
The company suffered a rocky 2002, hurting from
deep discounts offered in an attempt to compete with
McDonald's and other major fast food franchises
including Wendy's. Diageo PLC, Burger King's
former parent company, sold the fast food purveyor
to a consortium of U.S. investors. Burger King is
also opting for healthier menu choices in order to
attract and keep customers with changing tastes and
health concerns.
10) Competition Among Bottled Waters
The $7 billion market for bottled water is
booming, growing 30% in sales in 2002 over 2001
figures, leaping far ahead of soft drink growth which
was only 0.6% for the same period. It's not
surprising, when comparing soft drink markets to the
bottled water market, to find that the two top U.S.
competitors in bottled water are PepsiCo, Inc. and the
Coca-Cola Co. Pepsi's contender, Aquafina, is the
top-selling water produced in the U.S., with a 10%
market share, followed closely by Coca-Cola's
Dasani, with an 8.5% market share. On a global
basis, Nestlé is king, selling over 70 different brands
of bottled water in 160 countries. In the U.S. Nestle’s
Perrier Group of North America holds about a 37%
market share, with such popular brands as Perrier,
Arrowhead, Poland Spring and San Pellegrino.
Another contender is Groupe Danone World Water, a
Plunkett Research, Ltd.
French company ranked second in the global bottled
water market, which produces popular brands
including Evian, Sparkletts, Volvic and Crystal
Springs.
High-quality drinking water has been paramount
in European countries for quite some time, a trend
that is reflected in the highest sales of bottled water
in the world. It's only in the past decade that
awareness of the importance of hydration has become
prevalent in the U.S. Along with this awareness
comes an enormous business opportunity that the soft
drink companies were quick to embrace.
Producing and selling bottled water may be more
difficult than it seems. The U.S. Food and Drug
Administration regulates bottled water the same way
it does other ingestible products. Standards for
purification and labeling are strict, and spring water,
for example, must identify the location where it was
bottled on its labels.
Perrier, the carbonated water produced by Nestlé,
comes from a spring in the town of Vergeze in the
South of France. The water sold under the Aquafina
and Dasani brands is taken from municipal water
supplies. Aquafina is highly filtered using reverse
osmosis, while Dasani, as a way of differentiating
itself from the PepsiCo competition, adds a mix of
minerals to enhance the taste.
Marketing campaigns have been fierce, with both
companies spending millions to put their products in
the public eye. Coca-Cola placed Dasani vending
machines in health clubs and ran ads similar to
carbonated beverage ads. PepsiCo took a different
tack, distancing its water product from its other soft
drinks. A recent slogan was, "So pure, we promise
nothing," a less than subtle reference to Dasani's
added minerals.
The next step may be price wars with both
companies slashing prices in order to capture share of
a market which, so far, has shown very little loyalty
to a particular brand. Both bottlers are also
experimenting with additional bottled water products
with added flavors and nutrients, dubbed "sports
waters."
11) Diet Drink Sales Soar
While 2002 sales slumped for sugar-filled
favorites such as Coca-Cola Classic and Pepsi-Cola,
their sugar-free counterparts of Diet Coke, Diet Pepsi
and Diet Dr. Pepper all enjoyed substantial increases
in sales and market share. Overall, the soft drink
industry did show growth in 2002 over 2001, rather
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minor growth at 0.8% or an additional 76 million
cases. Total case volume sold was 10.1 billion.
Classic Coke and Pepsi remain the undisputed
favorites in the U.S. market with 19.3% and 13.1% of
the soft drink market respectively. Since 1998, Coke
lost 52.3% of market share when calculating its
industry growth factor (brand volume growth divided
by industry-wide volume growth). Things for Pepsi
are even more depressing since its IGF fell by 71.7%.
What are consumers reaching for when they are
thirsty? You guessed it: diet drinks.
Diet Coke has risen to the number-three spot
among the top 10 U.S. soft drinks. With an IGF of
34.9%, it's the drink that industry experts say will
help keep soft drink manufacturers in the black. Diet
Pepsi weighs in at number seven on the top 10 list
with an IGF of 23.7%. Diet Mountain Dew, also
produced by PepsiCo, is another diet winner.
Clearly, many consumers are watching their
calories—at least in terms of soft drinks—and
picking up artificially sweetened beverages more
than ever before.
The newest addition to the top 10 list is Diet Dr.
Pepper, squeezing in at number 10. Having enjoyed
steady gains for more than five years straight, 2002
was the year it really came into its own, showing a
3.9% sales gain over the previous year. No other soft
drink posted a gain that high. As obesity reaches
higher and higher levels worldwide, look for
continued growth in diet drink sales.
12) Wine Makers Try Mass Marketing
Competition and consolidation define the current
market for wine. After an unprecedented boom in the
1990s, sales for lower-end wines ($8 per bottle and
under), which comprise 75% of the volume of wines
sold in the U.S., dropped 6% in 2002 over the
previous year. Meanwhile, consumers enjoyed a
wider selection of wines from which to choose than
ever before.
Producers have been prey to a slow economy and
to a glut of grapes, overplanted during the boom of
the 90s. The resulting inventories of wine in the
current market are driving prices down, particularly
for medium to high quality French and California
labels. The situation has become dire enough to
force some grape farmers to plow under their vines
and attempt to grow other, more profitable crops.
Consolidation is taking place among vintners as
well as distributors and retailers. Gallo and Beringer
Blass Wine Estates were acquired by Foster's Group,
Ltd.; The Hogue Cellars was purchased by Vincor
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International, Inc.; and Ravenswood Winery is now producers and distillers. In 2002, Anheuser-Busch
part of Constellation Brands. As for distributors, Companies alone spent $821.7 million on advertising
Southern Wine & Spirits currently sells one out of and promotional expenses. Wine marketing efforts
every 10 bottles of wine in the U.S. market. Small are also spreading to restaurant chains such as Olive
vineyards have fewer chances to get their product on Garden, where wine promotions have resulted in
the store shelf or behind the bar. Today, independent sales doubling in some locations. Even unlikely
producers operating within a cottage industry face venues such as Texas Stadium, home of the Dallas
growing obstacles from the emergence of giant Cowboys, are promoting wine by training staff to
corporate operations producing goods for a global suggest wines to complement particular foods.
market. Compounding the problem is rising
competition from foreign markets, including
Australia, New Zealand, South Africa and countries
in South America and Eastern Europe.
The American palate remains more accustomed
to beer than wine. Wine consumption amounts to
one-tenth that of beer, placing the U.S. far behind
countries such as the U.K., Germany, Uruguay, Italy,
France and Luxembourg for per-capita consumption.
Of the wine consumed domestically in 2002, 67%
was from California, with foreign wines comprising
25% and wines from U.S. states other than California
making up the rest. White table wine is preferred by
most American consumers, at 40% of the national
volume consumed, with red following at 39%. Blush
wine holds 21% of the 2002 market. With regard to
varieties, Chardonnay remains the most popular with
27% of the market, Merlot is second with 15%,
Cabernet Sauvignon has 13%, White Zinfandel 8%
and Sauvignon Blanc 3%. Sparkling wine drinkers in
2002 quaffed 17.3 million gallons produced in the
U.S. and 9.7 million gallons of champagne and
sparkling wine produced elsewhere.
Although the practice is repellent to traditional
wine drinkers and collectors, wineries are attempting
to mass market their products. In doing so, they are
segmenting the wine market and building brands to
appeal to each segment. Producing a popular,
inexpensive, often non-vintage wine month after
month and year after year has become the lifeline for
producers in the low-end market. This is a radical
shift from boutique wines which typically focus on
idiosyncratic differences in taste, color and aroma.
The lower-priced vintage and non-vintage wines,
often made from blends of grapes, support the higher-
end. Kendall-Jackson, for example, can afford to
produce and market a limited-edition 1997 K-J
Stature Cabernet Sauvignon for $90 per bottle
because it sells a far larger volume of 2000 K-J
Collage Cabernet Sauvignon-Merlot for $8.50 per
bottle.
Advertising budgets for wine are expanding,
exceeding $111 million in 2002. This figure is
dwarfed, however, by the amounts spent by beer

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Internet Research Tips:

Here are some useful web sites you won’t want to

miss. Also, see our “Contacts” chapter for hundreds
of resources hand-selected by our editors. (Plunkett
Research Online subscribers should use the
“Organizations and Associations” tool.)

Food Institute (The)

www.foodinstitute.com
Tools available at this web site include food
industry news, international news, food regulation
and food market reports.

Economic Research Service of the USDA

www.ers.usda.gov
The ERS is the main source of economic
information and research from the U.S. Department
of Agriculture. Its web site provides a wealth of
information on topics from nutrition to food
consumption to biotechnology and agriculture.

American Dietetic Association

www.eatright.org
This organization's web site offers consumers a
nutrition Knowledge Center and a Healthy Lifestyle
Center.

National Restaurant Association

www.restaurant.org
On this web site, you can learn everything you
ever wanted to know about the restaurant business,
from industry research to how to open a restaurant.

International Food Information Council

http://ific.org
Communicates a wealth of science-based
information on food safety and nutrition. This web
site provides extensive research tools.

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Chapter 2

FOOD STATISTICS
Contents:

U.S. Food Manufacturing: 1997-2001 p. 15

U.S. Food Price Inflation: 1982-2002 p. 16
Percent of Family Income Spent on Food, U.S.: 1950-2001 p. 17
What a Consumer Food Dollar Pays for Industry-wide, U.S. p. 18
U.S. Store Characteristics by Format Type: 2001 p. 19
U.S. Food and Grocery Store Format Growth Trends: 1980, 2001, 2006 p. 20
U.S. Food Supply: Food Servings Available per Capita per Day, 1970-1997 p. 21
World Exports in Agricultural Products, 2001 p. 22
World Exports of Agricultural Products, By Trade Route: 2001 p. 23
U.S. Farmers and Agriculture Profiles: 1790-2002 p. 24
World and U.S. Supply and Use for Grains: 2000-2003 p. 25
U.S. Meat Supply and Use: 2001-2003 p. 26
Per Capita Consumption of Poultry and Livestock, U.S.: 1960 to Estimated 2002 p. 27
U.S. Egg Supply and Use: 2000-2003 p. 28
U.S. Milk Supply, Use and Prices: 2000-2003 p. 29
U.S. Tobacco Production Overview: 1970-2003 p. 30
U.S. Tobacco Manufacturing: 2001 p. 31
U.S. Restaurant Industry Overview p. 32
U.S. Restaurant Industry Forecasts p. 33
U.S. Restaurant Industry: Food & Drink Sales Projections, 2002-2003 p. 34
U.S. Restaurant Industry Operating Ratios: 2002 p. 35
U.S. Restaurant Industry: Average Salary and Bonus Figures p. 36
Beverages: Per Capita Consumption, 1970-2000 p. 37
Top 10 Soft Drinks, U.S.: 2002 p. 38
U.S. Alcoholic Beverages Manufacturing: 2001 p. 39
Wine Sales in the U.S.: 1991-2002 p. 40

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U.S. Food Manufacturing: 1997-2001 (latest data available)

All Employees Production workers Goods

Year Total cost of Total value

Payroll Hours Wages
Number Number materials of shipments
(US$ 000) (000) (US$ 000)
(US$ 000) (US$ 000)

2001 1,504,666 43,586,136 1,145,128 2,310,153 28,485,677 258,670,228 451,385,857

2000 1,505,642 42,657,764 1,149,631 2,327,200 27,897,267 251,568,953 435,229,643

1999 1,488,076 41,428,289 1,134,624 2,309,894 27,139,205 249,834,628 426,000,288

1998 1,498,667 39,659,857 1,140,157 2,314,849 26,159,910 255,053,796 428,478,276

1997 1,466,956 38,366,240 1,112,307 2,234,216 25,185,751 258,537,984 421,737,017

Source: U.S. Census, Annual Survey of Manufacturers.

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U.S. Food Price Inflation: 1982-2002*

In Percent

Year Inflation (%)

1982 4.1
1983 2.1
1984 3.8
1985 2.3
1986 3.2
1987 4.1
1988 4.1
1989 5.8
1990 5.8
1991 2.9
1992 1.2
1993 2.2
1994 2.4
1995 2.8
1996 3.3
1997 2.6
1998 2.7
1999 2.1
2000 2.3
2001 3.2
2002* 2.1
* Estimated.

Source: U.S. Bureau of Labor Statistics; U.S. Dept. of Agriculture, Economic

Research Service.

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Percent of Family Income Spent on Food, U.S.: 1950-2001

Year Away From Home At Home Total Food

1950 3.6 16.9 20.5
1960 3.4 14.1 17.5
1970 3.6 10.3 13.8
1980 4.4 8.9 13.2
1990 4.4 7.2 11.6
2000 4.1 6.1 10.1
2001 4.0 5.9 10.0

Source: U.S. Dept. of Agriculture, Economic Research Service.

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What a Consumer Food Dollar Pays for

Industry-wide, U.S.
In U.S. Cents

Cost
Type of Expense
(in U.S. cents)

Total 100.0

Farm Value 19.0

Labor 38.0

Packaging 8.0

Gross Profit 4.5

Transportation 4.0

Advertising 4.0

Rent 4.0

Energy 3.5

Business Taxes 3.5

Depreciation 3.5

Interest 2.5

Repairs 1.5

Other 4.0
Source: U.S. Dept. of Agriculture, Economic Research Service.

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U.S. Store Characteristics by Format Type: 2001

GM/HBC2 and
Total Area Other Non-
Weekly Sales SKU's1
(Sq. Ft.) Food % of
Sales
Traditional Grocery Channel

Conventional 25,800 $160,000 22,000 9%

Superstore 51,200 360,000 27,000 13

Food/Drug Combo 55,700 432,000 52,000 15

Warehouse Store 42,000 290,000 24,500 6

Super Warehouse 59,500 640,000 32,500 8

Limited Assortment 11,200 90,000 1,900 6

Convenience Store (Trad.)3 2,750 15,000 3,500 7

Convenience Store (Petro.)3 2,330 12,400 2,900 8

Other N/A 18,000 N/A N/A

4
Non-Traditional Grocery Channel

Hypermarket 180,000 $710,000 100,000+ 40%

Wholesale Club 135,000 960,000 5,000 60

Mini Club 16,000 127,000 2,400 15

Supercenter5 195,000 987,000 125,000 50

Deep Discounter 32,500 130,000 25,000 80

Internet6 N/A 12,500,000 18,000+ 40

1
SKU stands for Stock Keeping Unit, a numer that identifies the product for inventory and sales purposes.
2
GM/HBC stands for General Merchandise/Health & Beauty Care.
3
Non-gas merchandise sales only.
4
Reflects share adjustments for items not commonly found in the traditional grocery channel.
5
Includes Kmart, Super Target, Wal-Mart Supercenters, Fred Meyer and Meijer Stores.
6
Reflects national online suppliers.
Source: Bishop Consulting.

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U.S. Food and Grocery Store Format Growth Trends: 1980, 2001, 2006

1980 2001 2006

Share Share Share
Stores Stores Stores
(% ACV) (% ACV) (% ACV)
Traditional Grocery Channel

Conventional 30,250 55.2% 13,000 18.76% 12,500 15.05%

Superstore 3,150 11.6 7,900 25.89 9,200 25.69

Food/Drug Combo 475 2.2 3,850 14.27 4,300 15.22

Warehouse Store 920 2.5 800 2.57 1,200 2.40

Super Warehouse 7 N/A 480 3.01 405 2.66

Limited Assortment 750 0.6 1,871 1.55 2,500 1.40

Convenience Store (Trad.)3 35,800 5.4 42,900 5.96 41,750 5.36

Convenience Store (Petro.)3 N/A N/A 40,800 4.55 42,500 4.17

Other 96,000 22.5 33,000 4.28 30,000 3

Total 167,352 100.0% 144,601 80.85% 144,355 75.19%

Non-Traditional Grocery Channel4

Hypermarket N/A N/A 9 0.06% 9 0.07%

Wholesale Club N/A N/A 991 8.50 1,200 8.53

Mini Club N/A N/A 174 0.26 210 0.22

Supercenter5 N/A N/A 1,575 9.86 2,020 15.26

Deep Discounter N/A N/A 190 0.34 300 0.29

Internet6 N/A N/A 80 0.12 200 0.43

Total N/A N/A 3,019 19.15% 3,939 24.81%

Note: % ACV stands for % of All Commodity Volume.
1
SKU stands for Stock Keeping Unit, a numer that identifies the product for inventory and sales purposes.
2
GM/HBC stands for General Merchandise/Health & Beauty Care.
3
Non-gas merchandise sales only.
4
Reflects share adjustments for items not commonly found in the traditional grocery channel.
5
Includes Kmart, Super Target, Wal-Mart Supercenters, Fred Meyer and Meijer Stores.
6
Reflects national online suppliers.
Source: Bishop Consulting.

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U.S. Food Supply: Food Servings Available per Capita per Day,
1970-1997
(latest information available)

Meat, poultry, fish,

Bread, cereal, Milk, yogurt and
Year dry beans, eggs and Vegetables Fruits
rice and pasta cheese
nuts

Number

1970 6.93 1.81 3.25 3.29 1.12

1971 6.91 1.82 3.28 3.28 1.15

1972 6.80 1.80 3.30 3.27 1.10

1973 6.95 1.80 3.20 3.31 1.12

1974 7.09 1.72 3.23 3.31 1.13

1975 7.30 1.67 3.23 3.37 1.18

1976 7.53 1.75 3.35 3.45 1.18

1977 7.40 1.73 3.34 3.42 1.19

1978 7.38 1.73 3.30 3.35 1.17

1979 7.52 1.73 3.30 3.38 1.18

1980 7.58 1.70 3.25 3.36 1.23

1981 7.61 1.66 3.27 3.36 1.19

1982 7.70 1.67 3.26 3.35 1.22

1983 7.74 1.69 3.32 3.29 1.26

1984 7.80 1.72 3.30 3.42 1.26

1985 8.17 1.75 3.40 3.42 1.26

1986 8.39 1.77 3.40 3.38 1.31

1987 8.73 1.77 3.35 3.38 1.35

1988 9.05 1.74 3.41 3.39 1.35

1989 8.99 1.71 3.36 3.51 1.33

1990 9.24 1.74 3.35 3.54 1.26

1991 9.35 1.72 3.39 3.51 1.26

1992 9.40 1.74 3.44 3.55 1.31

1993 9.67 1.71 3.43 3.55 1.36

1994 9.74 1.75 3.50 3.64 1.36

1995 9.68 1.72 3.48 3.56 1.34

1996 9.98 1.73 3.48 3.66 1.37

1997 10.12 1.71 3.51 3.71 1.40

Source: U.S. Dept. of Agriculture, Economic Research Service.

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World Exports in Agricultural Products, 2001

In US$ Millions

Trade Value $ 5,474.58

Annual percentage change

1980 - 1985 -2.32%

1985 - 1990 9.31%

1990 - 2001 2.56%

2000 0.78%

2001 -0.87%

Share in world merchandise trade 9.15%

Share in world exports of primary products 40.92%

Source: International Trade Statistics 2002, World Trade Organization.

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World Exports of Agricultural Products, By Trade Route: 2001

In US$ Billions

Trade Value Annual percentage

(US$ Bil.) change (%)
Trade Route

2001 1990-01 2000 2001

Intra-Western Europe 172.8 1.5 -5.2 -2.2

Intra-Asia 60.5 3.6 6.0 -2.5

North America to Asia 34.0 0.7 11.4 -6.1

Intra-North America 33.6 6.1 4.9 0.8

Latin America to Western Europe 17.7 2.7 -4.2 -0.3

Latin America to North America 17.1 4.6 4.1 -7.1

Source: International Trade Statistics 2002, World Trade Organization.

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U.S. Farmers and Agriculture Profiles: 1790-2002

Farmers as a Land in Farms Average

Total U.S. Number of
Percent of U.S. (Thousands of Farm Size
Population Farms
Workforce Acres) (Acres)

1790 3,929,214 90% N/A N/A N/A

1800 5,308,483 N/A N/A N/A N/A
1810 7,239,881 N/A N/A N/A N/A
1820 9,638,453 N/A N/A N/A N/A
1830 12,866,020 N/A N/A N/A N/A
1840 17,069,453 69% N/A N/A N/A
1850 23,191,786 64% 1,449,000 N/A 203
1860 31,443,321 58% 2,044,000 N/A 199
1870 38,558,371 53% 2,660,000 N/A 153
1880 50,155,783 49% 4,009,000 N/A 134
1890 62,941,714 43% 4,565,000 N/A 136
1900 75,994,266 38% 5,740,000 N/A 147
1910 91,972,266 31% 6,366,000 N/A 138
1920 105,710,620 27% 6,454,000 N/A 148
1930 122,775,046 21% 6,295,000 14,633,252 157
1940 131,820,000 18% 6,102,000 17,942,968 175
1950 151,132,000 12% 5,647,800 1,202,019 216
1960 180,007,000 8% 3,962,520 1,175,646 303
1970 204,335,000 5% 2,949,140 1,102,371 390
1980 227,020,000 3% 2,439,510 1,038,885 426
1990 246,081,000 3% 2,145,820 986,850 461
2000 282,224,348 N/A 2,172,280 943,090 434
2001 285,317,559 N/A 2,155,680 941,310 437
2002 288,368,698 N/A 2,158,090 941,480 436
Source: U.S. Dept. of Agriculture; U.S. Census Bureau.

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World and U.S. Supply and Use for Grains1: 2000-2003

In Million Metric Tons

Year Output Total Supply Trade2 Total Use Ending Stocks

World
Total grains3
2000-2001 1,839.67 2,401.88 232.95 1,860.16 541.72
2001-2002 1,868.34 2,410.06 238.15 1,896.81 513.25
2002-2003 1,806.01 2,319.25 229.54 1,893.27 425.98
Wheat
2000-2001 582.05 788.69 102.78 584.41 204.29
2001-2002 580.03 784.31 108.01 585.60 198.72
2002-2003 564.28 763.00 102.22 595.53 167.46
Coarse grains4
2000-2001 859.67 1069.60 106.00 880.19 189.41
2001-2002 891.18 1080.59 103.17 900.84 179.74
2002-2003 860.67 1040.41 100.53 888.98 151.43
Rice, milled
2000-2001 397.96 543.59 24.17 395.56 148.03
2001-2002 397.13 545.16 26.96 410.37 134.78
2002-2003 381.06 515.84 26.79 408.76 107.09
United States
Total grains3
2000-2001 339.83 420.91 88.11 255.36 77.43
2001-2002 321.86 405.20 83.82 253.96 67.42
2002-2003 295.54 367.97 75.07 250.99 41.91
Wheat
2000-2001 60.76 89.05 28.90 36.30 23.85
2001-2002 53.26 80.04 26.16 32.72 21.15
2002-2003 43.99 67.05 23.81 31.13 12.10
Coarse grains4
2000-2001 273.13 324.70 56.62 215.39 52.70
2001-2002 261.86 317.12 54.71 217.36 45.05
2002-2003 245.04 292.79 47.89 215.98 28.91
Rice, milled
2000-2001 5.94 7.15 2.59 3.68 0.89
2001-2002 6.74 8.04 2.94 3.88 1.22
2002-2003 6.51 8.14 3.36 3.88 0.90
1 2
Note: 2001-2002 figures are estimates and 2002-2003 figures are projections. Aggregate of local marketing years. Based on
3 4
export estimate. Wheat, coarse grains and milled rice. Corn, sorghum, barley, oats, rye, millet and mixed grains (for U.S.
excludes millet and mixed grains).
Source: U.S. Dept. of Agriculture, Economic Research Service.

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U.S. Meat Supply and Use: 2001-2003

In Millions of Pounds3

Supply Use
Year Beginning Total Ending Total Per Capita
Production1 Imports Exports
Stocks Supply Stocks Consumption Consumption2

Beef
2001 525 26,212 3,164 29,901 2,269 606 27,026 66.4
2002 606 27,192 3,218 31,016 2,447 691 27,878 67.9
2003 691 26,240 3,265 30,196 2,500 525 27,171 65.5
Pork
2001 478 19,160 951 20,588 1,560 536 18,492 50.4
2002 536 19,685 1,071 21,292 1,614 533 19,145 51.7
2003 533 19,552 1,080 21,165 1,645 540 18,980 50.7
Total Red Meat4
2001 1,021 45,804 4,260 51,085 3,836 1,160 46,089 118.5
2002 1,160 47,305 4,451 52,916 4,068 1,238 47,610 121.3
2003 1,238 46,167 4,510 51,915 4,165 1,079 46,671 117.8
Chicken
2001 798 30,938 14 31,749 5,555 712 25,482 76.9
2002 712 31,895 12 32,619 4,800 763 27,057 80.8
2003 763 31,831 12 32,605 5,125 700 26,780 79.3
Turkey
2001 241 5,489 1 5,732 487 241 5,004 17.6
2002 241 5,638 1 5,880 439 333 5,107 17.8
2003 333 5,601 1 5,935 470 350 5,114 17.6
Total Poultry5
2001 1,048 36,942 18 38,008 6,224 960 30,823 95.6
2002 960 38,080 17 39,057 5,373 1,101 32,582 100.1
2003 1,101 37,941 17 39,059 5,715 1,056 32,287 98.2
Red Meat & Poultry
2001 2,069 82,746 4,278 89,093 10,060 2,120 76,912 214.1
2002 2,120 85,385 4,468 91,973 9,441 2,339 80,192 221.4
2003 2,339 84,108 4,527 90,974 9,880 2,135 78,958 216.1
Note: 2002 figures are estimates and 2003 figures are forecasts.

1 Total including farm production for red meats and, for poultry, federally inspected plus non-federally inspected, less condemnations.
2 Pounds, retail-weight basis. 3 Carcass weight for red meats and certified ready-to-cook weight for poultry. 4 Beef, pork, veal, lamb
and mutton. 5 Broilers, turkeys and mature chicken.

Source: U.S. Dept. of Agriculture, Economic Research Service; Dept. of Commerce, Bureau of Economic Analysis.

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Per Capita Consumption of Poultry and Livestock, U.S.:

1960 to Estimated 2002
In Pounds (Lbs.)

Total Red
Total Red Other Total Meat Total Commercial
Year Beef Pork Broilers Turkey Fish and
Meat Chicken Chicken Poultry Shellfish
Poultry

1960 63.3 131.6 59.1 23.6 4.4 28.0 6.3 34.3 165.9 10.3

1965 74.6 134.0 51.8 29.9 3.8 33.7 7.5 41.2 175.2 10.8

1970 84.4 145.8 55.8 36.6 3.7 40.3 8.1 48.4 194.2 11.8

1975 88.2 136.3 42.9 36.3 2.7 39.0 8.3 47.3 183.9 12.2

1980 76.6 136.8 57.3 45.8 2.2 48.0 10.3 58.3 195.1 12.5

1985 79.2 134.4 51.9 51.0 2.1 53.1 11.6 64.7 199.1 15.1

1990 67.8 120.0 49.7 59.5 2.0 61.5 17.6 79.1 199.1 15.0

1991 66.8 119.5 50.3 62.1 1.9 64.0 17.9 81.9 201.4 14.9

1992 66.5 121.9 53.1 65.9 1.9 67.8 17.9 85.7 207.6 14.8

1993 65.1 119.7 52.3 68.5 1.8 70.3 17.7 88.0 207.7 15.0

1994 67.0 122.1 53.0 69.5 1.6 71.1 17.8 88.9 211.0 15.2

1995 67.5 122.0 52.4 68.8 1.6 70.4 17.9 88.3 210.3 15.0

1996 68.2 119.6 49.1 70.4 0.9 71.3 18.5 89.8 209.4 14.8

1997 66.9 117.7 48.7 71.9 0.5 72.4 17.6 90.0 207.7 14.6

1998 68.0 122.5 52.5 72.5 0.4 72.9 18.0 90.9 213.4 14.9

1999 69.1 124.8 53.9 77.0 0.5 77.5 18.0 95.5 220.3 15.3

2000 69.6 123.8 52.4 76.7 1.1 77.8 17.8 95.6 219.5 15.4

2001 66.2 120.9 53.0 78.3 1.1 79.4 18.3 97.7 218.6 15.5

2002 64.0 118.5 53.0 80.5 1.0 81.5 18.4 99.9 218.4 15.5
Note: All products are on a retail weight basis, except "other chicken" and "turkey" which are reported by USDA on a carcass-weight
basis.
1
Includes beef/port/veal, and mutton/lamb,but excludes edible offals.
2
Estimated by the U.S. Dept. of Agriculture and Economic Research Service.
3
Forecasted by National Chicken Council.
Source: U.S. Department of Agriculture, Economic Research Service.

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U.S. Egg Supply and Use: 2000-2003

In Millions of Dozen

2000 2001 2002* 2003*

Supply
(Mllions of dozen)

Beginning stocks 7.6 11.4 10.4 10.3

Production 7,033.5 7,155.0 7,221.0 7,235.0
Imports 8.4 8.9 15.0 12.0
Total supply 7,049.5 7,175.2 7,246.4 7,257.3
Use
(Mllions of dozen)

Exports 171.1 190 173.7 166

Hatching use 940.2 953.0 964.0 960.0

Ending stocks 11.4 10.4 10.3 10
Consumption
Total (Millions of
5,926.8 6,021.8 6,098.4 6,121.3
dozen)
Per capita (Number) 252.1 253.7 254.6 253.1

* 2002 figures are estimates. 2003 figures are projections.

Source: U.S. Dept. of Agriculture, Economic Research Service.

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U.S. Milk Supply, Use and Prices: 2000-2003

In Millions of Dozen

2000 2001 2002 2003

Supply (Billions of pounds)

Beginning stocks 7.4 8.9 8.8 11.2

Production 167.4 165.2 169.2 171.0
Farm use 1.3 1.3 1.2 1.2
Marketings 166.0 163.9 167.9 169.8
Imports 4.6 5.4 5.2 5.0
Total supply 178.1 178.2 181.9 186.1
Use (Billions of pounds)

Commercial use 168.4 169.2 170.4 172.5

Ending commercial stocks 8.9 8.8 11.2 11.9

CCC net removals
Milkfat basis 0.8 0.3 0.3 1.7
Skim-solids basis 8.5 6.3 9.6 8.8
Milk Prices (Dollars per cwt)

9.55-
9.99 12.29 11.03
Basic formula/Class III 9.85
9.80-
11.51 13.88 11.22
Class IV 10.30
11.10-
12.61 14.51 12.76
All milk 11.40

CCC Product Net Removals (Millions of pounds)

Butter 11 0 0 50

Cheese 17.0 17.0 9.0 50.0

Nonfat dry milk 690.0 525.0 817.0 715.0
Dry whole milk 34.0 3.0 0.0 0.0
Note: Totals may not add due to rounding.

Source: U.S. Dept. of Agriculture, Economic Research Service.

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U.S. Tobacco Production Overview: 1970-2003

Based on All Types of Tobacco

Total Total Value of

Total Yield Price per Unit
Year Harvested Production Production
(pounds) (US$ per lb.)
(acre) (000 pounds) (US$ 000)
1970 898,330 2,122 1,906,453 N/A N/A
1971 837,590 2,035 1,704,884 N/A N/A
1972 842,420 2,076 1,749,085 N/A 1,451,275
1973 886,590 1,965 1,742,105 N/A N/A
1974 962,620 2,067 1,989,728 N/A N/A
1975 1,086,650 2,008 2,182,304 N/A N/A
1976 1,046,920 2,041 2,136,674 N/A N/A
1977 965,800 1,982 1,914,129 N/A 2,270,360
1978 963,730 2,101 2,024,820 N/A N/A
1979 827,700 1,844 1,526,516 1.411 N/A
1980 921,020 1,939 1,786,225 1.523 N/A
1981 976,580 2,113 2,063,589 1.706 N/A
1982 912,730 2,185 1,994,494 1.764 N/A
1983 789,155 1,811 1,428,969 1.746 N/A
1984 791,700 2,183 1,727,962 1.806 N/A
1985 688,020 2,197 1,511,638 1.645 N/A
1986 580,550 2,001 1,161,940 1.524 N/A
1987 586,290 2,028 1,188,868 1.573 1,869,569
1988 634,030 2,160 1,369,500 1.646 2,254,206
1989 678,200 2,016 1,367,188 1.708 2,335,052
1990 733,310 2,218 1,626,380 1.738 2,827,167
1991 763,680 2,179 1,664,372 1.773 2,947,309
1992 784,440 2,195 1,721,671 1.777 3,059,246
1993 746,405 2,161 1,613,319 1.754 2,829,161
1994 671,065 2,359 1,582,896 1.758 2,779,056
1995 663,525 1,914 1,269,910 1.820 2,307,168
1996 733,060 2,072 1,518,704 1.882 2,853,739
1997 836,230 2,137 1,787,399 1.802 3,217,176
1998 717,605 2,062 1,479,867 1.828 2,700,795
1999 647,160 1,997 1,292,692 1.828 2,356,304
2000 472,410 2,229 1,052,999 1.910 2,001,775
2001 432,340 2,293 991,552 1.920 1,952,120
2002 430,280 2,068 889,632 1.907 1,726,013
2003 417,510 N/A N/A N/A N/A
Source: U.S. Dept. of Agriculture, National Agricultural Statistics Service.

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U.S. Tobacco Manufacturing: 2001

(latest data available)

All Employees Production workers Goods

Total value
Payroll Total cost of
Hours Wages of
Number (US$ Number materials
(000) (US$ 000) shipments
000) (US$ 000)
(US$ 000)

Tobacco
manufacturing 26,706 1,390,690 19,570 38,290 874,297 6,986,296 53,097,966

Tobacco
stemming &
redrying 4,201 109,092 3,113 6,487 53,463 1,812,513 2,338,006

Tobacco
product mfg. 22,506 1,281,598 16,458 31,804 820,833 5,173,783 50,759,960

Cigarette
mfg. 15,218 1,017,948 10,908 21,395 654,995 4,139,006 47,190,379

Other
tobacco
product
mfg. 7,288 263,650 5,550 10,409 165,838 1,034,777 3,569,581
Source: U.S. Census, Annual Survey of Manufacturers.

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U.S. Restaurant Industry Overview

Sales, 2002 (US$ Bil.) $407.8

Sales, 2003 (US$ Bil.)* $426.1

Average daily sales (US$ Bil.) $1.20

Average per person sales check $15.00 - $24.99

Number of meals served1, 2002 (Bil.) 54

Restaurant industry sales as % of U.S. Gross

Domestic Product (GDP) 4%

Locations 870,000

Total annual wages & benefits, fullservice (US$ Bil) $49

Total annual wages & benefits, limited-service (US$
Bil.) $35

Employees, 2003 (Mil.)* 11.7

Employees, 2012 (Mil.) Projected 13.3

Annual household expenditures for food away from

home, 2000 $2,137

Annual per person expenditure for food away from

home, 2001 $855
* All figures are projected for 2003, unless otherwise noted.
1
Eaten in restaurants, school and work cafeterias.
Source: National Restaurant Association.

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U.S. Restaurant Industry Forecasts

Source: National Restaurant Association.

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U.S. Restaurant Industry: Food & Drink Sales Projections, 2002-2003

2002 Projected 2003 Projected
2002 - 2003 2002 - 2003
F&D Sales F&D Sales
(% Change) (Real % Change)
(US$ 000) (US$ 000)
GROUP I – COMMERCIAL RESTAURANT SERVICES1 EATING PLACES
Fullservice restaurants2 $146,148,997 $153,164,149 4.8% 2.1%
Limited-service (fast-food) restaurants3 116,113,251 120,873,894 4.1 1.4
Commercial cafeterias 2,033,875 1,922,012 -5.5 -8.2
Social caterers 3,948,243 4,129,862 4.6 1.9
Snack and nonalcoholic beverage bars 15,349,857 16,914,224 10.2 7.5
TOTAL EATING PLACES $283,594,223 $297,004,141 4.7% 2.0%
Bars and taverns 13,270,346 13,721,538 3.4 0.4
TOTAL EATING- AND- DRINKING PLACES $296,864,569 $310,725,679 4.7%4 2.0%
FOODSERVICE CONTRACTOR MANAGED SERVICES5
Manufacturing and industrial plants $6,185,443 $6,441,347 4.10% 1.40%
Commercial and office buildings 1,999,808 2,067,801 3.4 0.7
Hospitals and nursing homes 3,053,348 3,399,851 11.3 9.6
Colleges and universities 6,762,055 7,232,846 7.0 3.4
Primary and secondary schools 3,064,982 3,328,632 8.6 6.3
In-transit restaurant services (airlines) 2,044,527 2,152,887 5.3 2.6
Recreation and sports centers 3,730,455 3,902,056 4.6 1.9
TOTAL MANAGED SERVICES $26,840,618 $28,525,420 6.3% 3.6%
LODGING PLACES
Hotel restaurants $17,573,272 $18,346,496 4.4% 1.7%
Motor-hotel restaurants 152,206 156,011 2.5 -0.2
Motel restaurants 390,881 403,389 3.2 0.5
Other accommodation restaurants 341,299 353,586 3.6 0.9
TOTAL LODGING PLACES $18,457,658 $19,259,482 4.3% 1.6%
Retail-host restaurants6 $16,443,172 $17,343,141 5.5% 2.8%
Recreation and sports7 5,105,387 5,310,345 4.0 1.2
Mobile caterers 971,325 996,178 2.6 -0.1
Vending and non-store retailers8 8,949,736 9,316,675 4.1 1.4
TOTAL – GROUP I $373,632,465 $391,476,920 4.8% 2.1%
9
GROUP II – NONCOMMERCIAL RESTAURANT SERVICES
Employee restaurant services10 $826,462 $789,980 -4.4% -6.90%
Public and parochial elementary, secondary schools 4,973,640 4,958,705 -0.3 -2.6
Colleges and universities 5,015,708 5,051,361 0.7 -2.7
Transportation 1,245,829 1,357,564 9.0 6.8
Hospitals11 10,006,244 9,926,194 -0.8 -1.9
Nursing homes, homes for the aged, blind, orphans and
the mentally and physically disabled12 5,537,957 5,670,868 2.4 0.7
Clubs, sporting and recreational camps 3,683,241 3,866,970 5.0 2.3
Community centers 1,412,967 1,455,356 3.0 0.7
TOTAL – GROUP II $32,702,048 $33,076,998 1.1% -0.9%
TOTAL – GROUPS I AND II $406,334,513 $424,553,918 4.5% 1.8%
13
GROUP III – MILITARY RESTAURANT SERVICES
Officer and NCO clubs (Open mess) $1,012,460 $1,066,120 5.3% 2.6%
Military exchanges 489,910 516,855 5.5 2.8
TOTAL – GROUP III $1,502,370 $1,582,975 5.4% 2.7%
GRAND TOTAL $407,836,883 $426,136,893 4.5% 1.8%
1 Data are given only for establishments with payroll. 2 Waiter/waitress service is provided, and the order is taken while the patron is seated.
Patrons pay after they eat. 3 Patrons generally order at a cash register or select items from a food bar and pay before they eat. 4 Food-and-drink
sales for nonpayroll establishments should total $6,828,871,000 in 2003. 5 Also referred to as onsite foodservice and food contractors. 6 Includes
drug- and proprietary-store restaurants, general-merchandise-store restaurants, variety-store restaurants, food-store restaurants and grocery-
store restaurants (including a portion of delis and all salad bars), gasoline-service-station restaurants and miscellaneous retailers. 7 Includes
movies, bowling lanes, recreation and sport centers. 8 Includes sales of hot food, sandwiches, pastries, coffee and other hot beverages. 9
Business, educational, governmental or institutional organizations that operate their own restaurant services. 10 Includes industrial and
commercial organizations, seagoing and inland-waterway vessels. 11 Includes voluntary and proprietary hospitals; long term general, TB,
nervous and mental hospitals; and sales or commercial equivalent to employees in state and local short term hospitals and federal hospitals. 12
Sales (commercial equivalent) calculated for nursing homes and homes for aged only. All others in this grouping make no charge for food served
either in cash or in kind. 13 Continental United States only.
Source: National Restaurant Association, 2003 Restaurant Industry Forecast.

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U.S. Restaurant Industry Operating Ratios: 2002

Full Service Limited Service

Where It Came From

Total Sales 100% 100%

Where It Went

Cost of Food Sold 27% 32%

Cost of Beverages Sold 7 3

Salaries and Wages 31 29

Employee Benefits 4 2

Restaurant Occupancy Costs 6 6

Other 19 23

Income Before Income Taxes 6 5

Note: All figures are averages, are computed individually for each cost category and are rounded. All
amounts are reflected as a percentage of total sales.

Source: National Restaurant Association, Restaurant Industry Operations Report--2002.

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U.S. Restaurant Industry: Average Salary and Bonus Figures

Median base salary Median annual bonus
Owner $50,000 $16,000
President/Chief Executive Officer 63,500 21,000
Chief Financial Officer 70,000 10,000
Chief Operating Officer/General Mgr. 54,000 9,600
Treasurer 32,000 10,000
Head of:
Construction/Engineering 60,000 8,666
Development/Real Estate 100,000 13,550
Distribution/Purchasing 55,000 7,000
Franchising 127,500 25,000
Management Information Systems 55,000 9,500
Marketing 48,300 8,000
Operations 60,000 10,000
Personnel/Human Resources 45,500 5,000
Training 50,000 5,000
Quality Assurance 50,000 5,000
Controller 45,000 5,000
Food and Beverage Director 44,200 4,000
Executive Chef 48,000 5,000
Chef 35,000 2,500
Sous Chef 30,000 2,000
Pastry Chef 30,000 1,100
Nutritionist/Dietician 37,000 *
Wine Steward 31,050 7,000
Banquet Manager 32,000 3,000
Catering Manager 35,000 4,000
Unit Manager 35,132 4,615
Assistant Unit Manager 28,000 2,460
Night Manager 26,000 1,500
Manager Trainee 25,080 2,000
Dining Room Manager 30,000 2,000
Kitchen Manager 29,000 2,000
Regional Manager 62,500 15,000
District Manager 53,262 10,000
Regional Training Manager 50,914 4,318
* Insufficient data.
Source: National Restaurant Association, Compensation for Salaried Personnel in Restaurants.

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Beverages: Per Capita Consumption, 1970-20001

(Latest data available; In Gallons)

Carbonated soft Fruit

Milk Alcoholic beverages
drinks Selected drinks,
Bottled Canned Vegetable
Year Tea4 Coffee5 fruit cocktails
water iced tea juices
2 3 3 juices and Distilled
Whole Other Total Diet Regular Total Beer Wine Total3
ades6 spirits

Gallons
1970 25.5 5.8 31.3 6.8 33.4 NA 2.1 22.2 24.3 5.7 NA NA NA 18.5 1.3 1.8 21.6
1971 25.0 6.3 31.3 7.2 32.2 NA 2.2 23.3 25.5 6.2 NA NA NA 18.9 1.5 1.8 22.3
1972 24.1 6.9 31.0 7.3 33.6 NA 2.3 23.9 26.2 6.1 NA NA NA 19.3 1.6 1.9 22.8
1973 23.0 7.5 30.5 7.4 33.3 NA 2.7 25.0 27.6 6.0 NA NA NA 20.1 1.6 1.9 23.6
1974 21.7 7.7 29.5 7.5 33.2 NA 2.9 24.7 27.6 6.6 NA NA NA 20.9 1.6 2.0 24.5
1975 21.1 8.4 29.5 7.5 31.4 NA 3.2 25.0 28.2 6.9 NA NA NA 21.3 1.7 2.0 25.0
1976 20.4 9.0 29.3 7.7 32.5 1.2 3.8 27.0 30.8 7.0 NA NA NA 21.5 1.7 2.0 25.2
1977 19.5 9.5 29.0 7.5 24.5 1.3 4.3 28.7 33.0 6.5 NA NA NA 22.4 1.8 2.0 26.1
1978 18.7 9.8 28.6 7.2 27.3 1.9 4.6 29.5 34.2 6.8 NA NA NA 23.0 2.0 2.0 26.9
1979 18.0 10.2 28.2 6.9 29.3 2.2 4.9 29.8 34.7 7.2 NA NA NA 23.8 2.0 2.0 27.8
1980 17.0 10.5 27.6 7.3 26.7 2.4 5.1 29.9 35.1 7.4 NA NA NA NA NA NA NA
1981 16.3 10.8 27.1 7.2 26.0 2.7 5.3 30.0 35.4 6.7 NA NA NA 24.6 2.2 2.0 28.8
1982 15.5 10.9 26.4 6.9 25.9 3.0 5.5 29.8 35.3 8.4 NA NA NA 24.4 2.2 1.9 28.5
1983 15.2 11.1 26.3 7.0 26.3 3.4 6.0 29.3 35.2 7.3 NA NA NA 24.2 2.3 1.8 28.3
1984 14.8 11.6 26.4 7.1 26.8 4.0 6.6 29.3 35.9 7.7 NA NA NA 24.0 2.4 1.8 28.1
1985 14.3 12.3 26.7 7.1 27.4 4.5 7.1 28.7 35.7 7.8 NA NA NA 23.8 2.4 1.8 28.0
1986 13.5 13.0 26.5 7.1 27.5 5.0 7.6 28.2 35.8 8.3 NA NA NA 24.1 2.4 1.6 28.2
1987 13.0 13.3 26.3 6.9 26.7 5.7 9.4 32.4 41.9 7.9 5.4 0.1 0.2 24.0 2.4 1.6 28.0
1988 12.3 13.5 25.8 7.0 25.6 6.5 10.1 34.5 44.7 7.6 5.7 0.1 0.3 23.8 2.3 1.5 27.6
1989 11.3 14.7 26.0 6.9 26.2 7.4 10.7 34.7 45.4 7.6 5.9 0.1 0.3 23.6 2.1 1.5 27.2
1990 10.5 15.2 25.7 6.9 26.9 8.0 10.7 35.6 46.2 7.9 6.3 0.1 0.3 23.9 2.0 1.5 27.5
1991 10.1 15.5 25.6 7.4 26.7 8.0 11.6 36.2 47.8 7.4 6.9 0.2 0.3 23.1 1.8 1.4 26.3
1992 9.7 15.5 25.2 8.1 25.8 8.2 11.5 36.7 48.2 8.4 6.5 0.2 0.3 22.7 1.9 1.4 25.9
1993 9.2 15.3 24.6 8.3 23.3 9.3 11.5 37.2 48.7 8.5 6.9 0.4 0.3 22.5 1.7 1.3 25.5
1994 9.1 15.4 24.5 8.1 20.9 10.6 11.4 37.1 48.5 8.3 7.3 0.6 0.3 22.3 1.7 1.3 25.3
1995 8.6 15.4 24.0 7.9 20.3 11.5 10.9 36.5 47.5 8.3 7.7 0.7 0.3 21.8 1.7 1.2 24.7
1996 8.5 15.4 24.0 7.6 22.1 12.3 10.6 36.0 46.7 8.7 7.9 0.7 0.3 21.7 1.9 1.2 24.8
1997 8.3 15.3 23.6 7.3 23.3 12.9 10.6 36.2 46.8 8.7 8.2 0.8 0.3 21.6 1.9 1.2 24.7
1998 8.2 15.1 23.2 8.3 23.9 15.7 11.0 36.8 47.9 8.5 7.7 0.7 0.3 21.7 1.9 1.2 24.8
1999 8.2 14.9 23.1 8.2 25.1 17.7 11.5 38.2 49.7 9.3 7.7 0.7 0.3 21.8 2.0 1.2 25.0
2000 8.1 14.5 22.6 7.8 26.3 NA 11.6 37.7 49.3 8.4 NA NA NA 21.7 2.0 1.3 24.9
NA = Not available.
1
Carbonated soft drink, fruit drink, canned iced tea, vegetable juice and alcoholic beverage per capita figures are calculated by ERS
using industry data. Uses U.S. resident population, July 1 for everything except for coffee, tea and fruit juices, which use U.S. resident
2 3 4
population plus the Armed Forces overseas, July 1. Includes buttermilk. Computed from unrounded data. Converted to fluid
5
equivalent as follows: 200 6 oz. cups per pound of tea, dry leaf equivalent. Includes instant and decaffeinated coffee. Converted to
fluid equivalent as follows: 60 6 oz. cups per pound of regular roasted coffee and 187.5 6 oz. cups per pound of instant coffee.
6
Canned, bottled and frozen (reconstituted).

Source: U.S. Dept. of Agriculture, Economic Research Service.

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Top 10 Soft Drinks, U.S.: 2002

Based on Market Share

Million Million Market 2002

Rank Brand
Cases Gallons Share Growth

1 Coca-Cola Classic 1,953.0 2,929.6 19.3% -2.0%

2 Pepsi-Cola 1,328.5 1,992.7 13.1% -4.0%

3 Diet Coke 913.4 1,370.1 9.0% 3.0%

4 Mountain Dew 655.9 983.9 6.5% -4.2%

5 Sprite 633.2 949.7 6.3% -2.5%

6 Dr Pepper 596.9 895.4 5.9% -3.3%

7 Diet Pepsi 528.6 792.9 5.2% 3.5%

8 7 UP 174.5 261.8 1.7% -7.8%

9 Caffeine Free Diet Coke 170.3 255.5 1.7% -2.0%

10 Diet Dr Pepper 111.3 167.0 1.1% 3.9%

Top 10 Soft Drinks 7,065.6 10,598.4 69.8% -1.8%

All Others 3,063.9 4,596.0 30.2% 7.2%

Total Industry 10,129.5 15,194.4 100.0% 0.8%

Note: All results preliminary.
Source: Beverage Marketing Corporation.

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U.S. Alcoholic Beverages Manufacturing: 2001

(latest data available)

All Employees Production workers Goods

Total value
Payroll Total cost of
Hours Wages of
Number (US$ Number materials
(000) (US$ 000) shipments
000) (US$ 000)
(US$ 000)

Breweries 33,286 1,509,015 23,177 43,073 918,799 6,669,984 16,914,132

Wineries 23,774 870,639 11,129 19,905 319,600 4,190,196 8,154,387

Distilleries 7,401 302,056 5,260 11,768 197,477 1,998,974 4,310,422

Source: U.S. Census, Annual Survey of Manufacturers.

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Wine Sales in the U.S.: 1991-2002

In Millions of Gallons

Champagne/
Dessert Total Retail
Year Table Wine1 Sparkling Total Wine
Wine2 Value
Wine

2002 532 37 27 595 $21.1 billion

2001 503 34 25 561 $19.8 billion
2000 499 32 28 558 $19.0 billion
1999 475 31 37 543 $18.1 billion
1998 466 31 29 526 $17.0 billion
1997 461 29 29 519 $16.1 billion
1996 439 31 29 500 $14.3 billion
1995 404 30 30 464 $12.2 billion
1994 394 33 31 458 $11.5 billion
1993 381 35 33 449 $11.0 billion
1992 405 37 33 476 $11.4 billion
1991 394 39 33 466 $10.9 billion
Note: 2002 figure preliminary. Totals may not add due to rounding. Excludes exports.
1 Includes all still wines not over 14 percent alcohol; excludes Canadian coolers (made from malt).
2 Includes all still wines over 14 percent alcohol and sake. History revised for foreign bulk wine.

Source: U.S. Dept. of Commerce, Gomberg, Fredrikson & Associates, Wine Institute.

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